Excess capacity in many industries often drives M&A activity as firms strive to achieve which of the following?

Question

Quizplus · Accepted Answer

Excess capacity in industries can lead to mergers and acquisitions (M&A) as firms aim to achieve greater economies of scale (reducing costs by increasing production), economies of scope (reducing costs by expanding product lines or markets), and greater pricing power both with customers (by reducing competition) and with suppliers (by increasing purchasing power). All these factors contribute to the strategic motivations behind M&A activities.

Excess Capacity in Many Industries Often Drives M&A Activity as Firms